Rio Tinto PLC (RIO.LN) reported a 90% rise in 2017 net profit to US$8.76 billion and said it would pay shareholders a record full-year dividend. It also announced plans to buy back a further US$1 billion in stock, on top of the US$1 billion dedicated to repurchasing shares in mid-2017.
Here are some remarks from Rio Tinto's 2017 earnings report:
On cash flow:
"The strength of our cash flow is a result of resilient prices during the year coupled with a robust operational performance and a focus on mine-to-market productivity. Our strong balance sheet, world-class assets and disciplined allocation of capital puts us in the unique position of being able to invest in high-value growth through the cycle, and consistently deliver superior cash returns to shareholders."
"The effect of all price movements on the group's commodities in 2017 was to increase underlying earnings by $4,107 million compared with 2016. The Platts price for 62% iron Pilbara fines was 20% higher on average compared with 2016. Realized hard-coking-coal prices were 42% higher on average compared with 2016 and realized thermal-coal prices averaged 32% higher. Earnings and cash flows were also boosted by higher average prices for copper and aluminium, which were up 27% and 23%, respectively, year-on-year."
On capital expenditure:
"Capital expenditure expected to remain at around $5.5 billion in 2018 and around $6 billion in each of 2019 and 2020. Each year includes approximately $2.0-2.5 billion of sustaining capex."
"Movements in sales volumes increased earnings by $114 million compared with 2016. The main contributors were higher iron-ore shipments from the Pilbara, a 20% increase in titanium dioxide slag feedstock sales volumes and a 6% rise in bauxite sales."
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